Bitcoin Forum

For the past year and a half, a Silicon Valley startup has quietly convinced some of the biggest names in venture capital to back its effort to turn the technology behind bitcoin into a mass-marketed phenomenon.

Now, that company, which bears the name 21 Inc., is emerging from stealth to announce it has raised $116 million in venture funding, the most ever by a startup in the digital-currency sector, based on data from bitcoin news service Coindesk.

What it’s not yet publicizing is the precise nature of its operations, Chief Executive and co-founder Matthew Pauker will only say there will be “several interesting developments over the next weeks and months” about software and hardware products designed “to drive mainstream adoption of bitcoin.”

Since its launch six years ago by a mysterious coder who used the presumed pseudonym of Satoshi Nakamoto, bitcoin has drawn media attention as a wildly volatile digital currency. But amid stories of scandal, theft and turbulent prices, the general public has largely ignored the arguments of vocal supporters, who tout the digital currency’s potential to cut costs by removing middlemen from finance and commerce.

According to Silicon Valley investors such as those taking stakes in 21, say that failure to gain mass adoption is partly because the public’s attention has been misguidedly focused on bitcoin’s limited potential as a digital alternative to traditional currencies. In reality, they say, its underlying technology has far wider applications than that. Unlike the currency transactions that are generally associated with bitcoin, these new uses could range from lawyer-free smart contracts to tamper-proof online voting systems.

21’s lead investors include U.S. venture-capital heavyweights Andreessen Horowitz and RRE Ventures, along with Chinese private-equity firm Yuan Capital, with a strategic stake going to chipmaker Qualcomm Inc.QCOM +0.49% through its venture-capital unit.

Additionally, Khosla Ventures and Data Collective have invested in 21, as well as chief executives and founders from various tech companies, including PayPal co-founders Peter Thiel and Max Levchin, eBay Inc. co-founder Jeff Skoll, Dropbox Inc. CEO Drew Houston, Expedia Inc. CEO Dara Khosrowshahi and Zynga Inc. co-founder Mark Pincus.

Mr. Pauker said Qualcomm’s involvement is key. He hopes to exploit the Bridgewater, N.J., chipmaker’s mass-marketing and production capabilities in the development of a suite of consumer products that integrate with bitcoin’s core technology called the “blockchain.” This technology takes the form of a public, digital ledger that’s maintained by a decentralized network of thousands of independently owned computers.

Qualcomm’s involvement could spur speculation that 21 has its sights on the so-called “Internet of Things.” That’s the idea that a myriad of smart, Internet-connected appliances will in the future communicate with servers, networks and each other to optimize their operation, maintenance and energy usage without direct human involvement.

Some developers believe that bitcoin technology could play a key role in transparently managing the vast flow of information generated by these smart gadgets. The decentralized blockchain ledgers are free from the control of any one party, so smart appliances can in theory connect with computers built by other entities safely without worrying that the information was manipulated.

Starting out under the earlier name of 21e6, the company – which takes its name from the 21-million limit that bitcoin’s managing algorithm imposes on the total number of bitcoins to be released – spurred intense speculation in November 2013, when a regulatory filing revealed a $5 million fundraise.

Members of the bitcoin community speculated about a secret vehicle for Silicon Valley elites to develop high-powered equipment that could dominate bitcoin mining. Mr. Pauker’s comments about a consumer focus suggest that isn’t where the company has ended up.

The initial secrecy around 21 was “solely for pragmatic reasons – we didn’t have anything to say to the world,” – says co-founder Balaji Srinivasan, who is also a partner at Andreessen Horowitz. He compares 21’s work in building bitcoin products for the general public to the sequential development of 56-kilobit Internet modems, international fiber cables and wireless Internet towers, which all helped bring the Internet into people’s homes in the late 1990s.

This notion also has parallels with the mass Internet appeal achieved in the 1990s by the development of the Netscape browser by Marc Andreessen, a co-founder of Mr. Srinivasan’s firm. Asked for his views on 21, Mr. Andreessen said it “is working on what they — and we — consider to be core infrastructure for mainstreaming bitcoin.”

21’s announcement extends this year’s upswing in venture capitalists’ digital-currency investments, highlighted by January’s $75 million fundraising for San Francisco-based bitcoin wallet provider Coinbase Inc., whose investors include the New York Stock Exchange. Bitcoin-focused venture capital more than tripled to $347 million in 2014 from a year earlier, according Coindesk.

The money flow is paving the way for products and services aimed at transitioning bitcoin from its volatile, Wild West beginnings into an era of more secure infrastructure and mass appeal.

A week after its funding announcement, Coinbase unveiled the first licensed U.S bitcoin currency exchange. Later, high-tech security company BitGo Inc. launched a unique insurance program, while the New York-based Digital Currency Group’s Bitcoin Investment Trust earned regulatory approval to become the first publicly offered fund dedicated to owning bitcoin.

Well-funded custodial and financial services companies Xapo Ltd. and Circle Internet Financial Ltd. have also developed high-tech security and insurance projects. Meanwhile, San Francisco startup BitFury Holding BV has launched new, high-powered chips to take bitcoin mining to a new level of intensity.

None of this will matter if bitcoin doesn’t achieve mass adoption, says Mr. Pauker.

“Bitcoin is going to change the way that people and businesses and even machines interact with each other,” he says. “But for bitcoin to realize that vision we need mass adoption. It can’t just be for Silicon Valley.”

$116 million is an impressive number, I think they are the best funded bitcoin start up ever.

Very interesting. I would like to know more about exactly what it is they're trying/planning to do.

Yippee, more big corporate money aiming blockchain technology into a web of regulation and control while the little guys sit in federal prison cells for trading Bitcoin.

http://blogs.wsj.com/digits/2015/03/10/secretive-bitcoin-startup-21-reveals-record-funds-hints-at-mass-consumer-play/

Maybe tell those dudes to grab a money transmitter license like they're supposed to.   :P

J/K, we're still in the Wild Wild West phase of Bitcoin, shit happens, people go down when your trying to build something.

I'll let BurtW know if the federal government ever lets us talk to him again.

When Bitcoin becomes MasterCard I'll move on to something else. There are lots of federally regulated investment opportunities in the wild. Bitcoin is unnecessary for that purpose.

This may seem like a big deal for bitcoin, however, it's not.
They will use the blockchain technology for their own products and leave bitcoin hanging in the cold.
Don't expect this to be relevant to the bitcoin economy.
Interesting startup though.

It sucks what happened to BurtW, but please let's not drag that into this thread.

Bitcoin will never become MasterCard, Bitcoin isn't a company or Financial Institution.

This isn't an either or situation.  You can't have Bitcoin thrive or survive, and no one pays the bills to keep the lights on and electricity running.

Even Linux wouldn't be where it is today without Android OS which is owned by Google, probably the largest centralized force in the universe.

Need to play both sides of the coin to be viable, there's no hard stance needed to be taken.

$116 million is an impressive number, I think they are the best funded bitcoin start up ever.

Yep it is i think, great news.  This could be it guys hold onto your hats.

Geez wake up man. It's not a bitcoin start up, they will just use the blockchain idea for their own products, not bitcoin or its network.

Do you honestly believe a large collection of corporate investors are doing this for any other reason than profit? That profit most likely will not help the small Bitcoin user or holder. I can see it being much more desirable for corporate investors to have price hold stable rather than climbing. This will do nothing to help me but I'm sure some groups will become famously wealthy.

This may seem like a big deal for bitcoin, however, it's not.
They will use the blockchain technology for their own products and leave bitcoin hanging in the cold.
Don't expect this to be relevant to the bitcoin economy.
Interesting startup though.

We on our ways fellas...

http://blogs.wsj.com/digits/2015/03/10/secretive-bitcoin-startup-21-reveals-record-funds-hints-at-mass-consumer-play/


This is great under the radar news, mainly because only the silicon valley giants really know what 21 is all about.

Knowing that so many brilliant people and companies are supporting and investing in this secretive company is going to be truly ground breaking.

Can't wait to see what type of smart appliances or gadgets 21 comes up with, that will get the masses flocking to get a peek at this new Bitcoin centric tech.

Good if bitcoin gains big from them, but apparently they are also companies seeking for profit. Not sure if they will even support bitcoin and the network, or they will only use it for the benefit of their companies.

21e6? Nice name.

Even though the news are excellent (if correct and the money gets properly used), I've been waiting for these companies "aiming" at mainstream BTC.
The adoption is picking up, but not quickly enough.

Geez wake up man. It's not a bitcoin start up, they will just use the blockchain idea for their own products, not bitcoin or its network.

Wouldn't this blockchain need bitcoin to operate since as far as i know blockchain can't operate without bitcoin or any other crypto.

http://blogs.wsj.com/digits/2015/03/10/secretive-bitcoin-startup-21-reveals-record-funds-hints-at-mass-consumer-play/

Qualcomm's chips represent a large portion of the cell phone market.  They intend to bring their cellular chip technology to all manner of interconnected things, and use the Bitcoin blockchain to do so.

Yes you're right. The blockchain, the network and currency can not be separated.This belongs together.

By the way...


He knew it. :D
Listen 25:00 to 26:35!

https://www.youtube.com/watch?v=9npQ5f74Nr4#t=25m00 (https://www.youtube.com/watch?v=9npQ5f74Nr4#t=25m00)

At 26:20 he said:"Bitcoin protocol being embedded in chips.Chips that can't be modified very easily!"

What do you do if there's a protocol change, throw your phone away?

Yea, you're right.  They just chose the name "21e6" because it's really catchy!   ::)

No need to "Question Authority" all the time... 8)

though you need to question a 'dencentralised' system having 'authority'  ;)

This is a great news for bitcoin.
But we still have no idea what the main business of Bitcoin Startup 21.
They are miner vendor before.
Is they still produce asic miners?

Additionally, Khosla Ventures and Data Collective have invested in 21, as well as chief executives and founders from various tech companies, including PayPal co-founders Peter Thiel and Max Levchin, eBay Inc. co-founder Jeff Skoll, Dropbox Inc. CEO Drew Houston, Expedia Inc. CEO Dara Khosrowshahi and Zynga Inc. co-founder Mark Pincus.

Qualcomm’s involvement could spur speculation that 21 has its sights on the so-called “Internet of Things.” That’s the idea that a myriad of smart, Internet-connected appliances will in the future communicate with servers, networks and each other to optimize their operation, maintenance and energy usage without direct human involvement.

$116 million is an impressive number, I think they are the best funded bitcoin start up ever.

Threads like this make me believe people need a central authority to make them feel successful. If there's not some big rich powerful collective guiding the direction they aren't happy. Or maybe they're just greedy fucks looking to cash out at the earliest opportunity and big rich powerful collectives will help them do that faster.

the irony in gavin only having to convince 5 people to make the change, thats a hell of alot less people then had to be convinced for the too big to fail banks to be bailed out...........hmmm gotta love 'decentralised' cryptocurrencies...such a great alternative to the centralised banks controlled fiat.

From what I read, I think they are more interested in the blockchain technology rather than bitcoin itself. Since they didn't reveal into detail what they are up to, I supposed it has something to do with another altcoin? No...Or I see creation of new database to support some products that is also based on public ledger, either way, still has nothing to do with bitcoin.

More likely trying to integrate the blockchain technology into existing banking/finance sector. Could save a lot of paperwork and layoff more than a dozen departments.

More likely trying to integrate the blockchain technology into existing banking/finance sector. Could save a lot of paperwork and layoff more than a dozen departments.

Geez wake up man. It's not a bitcoin start up, they will just use the blockchain idea for their own products, not bitcoin or its network.

Curious how you determined this. I read through their stuff and everything pointed to the use of bitcoin between networked devices. Did I miss something?